INSIDE HEALTH CARE

Northwestern Memorial's bid to acquire Lake Forest Hospital includes commitment to new facility

November 26, 2009|By Bruce Japsen, TRIBUNE REPORTER

The parent of Northwestern Memorial Hospital in Chicago will commit to building a new Lake Forest Hospital or replace the north suburban medical center within the next decade as part of its proposed acquisition of the 215-bed facility, state records show.

The acquisition would make Lake Forest Hospital a subsidiary of Northwestern Memorial HealthCare, and includes a commitment to continue Lake Forest's expansion of its Grayslake campus, which includes an emergency center and various outpatient services, documents filed recently with the Illinois Health Facilities and Services Review Board said.

Northwestern Memorial announced plans for Lake Forest to become a subsidiary of the Chicago academic medical center in September, but details were not disclosed at that time.

Earlier this month Northwestern Memorial outlined its plans as required by the state facilities and services review board, which could decide whether to approve the transaction as soon as January 2010. As part of the state review process Northwestern Memorial must show a need for such a deal and its commitment to the community.

A price tag for the future construction was not disclosed, but likely would run into hundreds of millions of dollars based on construction costs of other similar-sized facilities approved by the board in recent years.

The state filing listed the "enterprise value" of the existing Lake Forest Hospital operation in the "range of $216 million to $242 million" which includes the 67-year-old main complex that houses the bulk of Lake Forest's general acute-care patients. The Grayslake campus includes 14 emergency treatment beds, diagnostic imaging, cardiac testing and physical therapy services.

Northwestern Memorial is one of the wealthiest hospital systems in the country, with more than $1.1 billion in cash.

A new Lake Forest Hospital would become the third major building financed by Northwestern Memorial in the last decade. The system unveiled a $580 million replacement of Northwestern Memorial Hospital in 1999 and a $500 million Prentice Women's Hospital that opened two years ago on the main academic medical center campus in the Streeterville neighborhood just east of Michigan Avenue.

In Lake Forest, Northwestern Memorial is making its largest entree into the affluent northern suburbs. In 2007 Northwestern Memorial purchased a 10-acre parcel in Northbrook for $9 million. It also has opened clinics in certain suburbs in what executives said is a way to bring "services where our patients live and work."